Fox and Hound-Fall 2017

In our initial Fox and Hound opinion article, Cliff Moone and Thom Shell give their viewpoints on Economic Development in our region. The focus of the article is upon Economic Regeneration and how it is necessary for us to creatively reinvent who we are as we move forward through the 21st Century. Hickory, the largest city in the Northwest Foothills, is in many ways the Economic Hub and gateway of the region. The various communities of our region face the same issues. The loss of so much of our manufacturing base, changes in how we are now defined socio-economically and culturally, and how do we evolve to remain relevant in an ever changing landscape. Hickory provides the backdrop for the debate about how best to move forward…

James Thomas Shell, The Hickory Hound:

Since 2000, our region, here in Northwestern North Carolina has faced a great many economic challenges. We haven’t grown very much in population and the economy has never fully recovered from the hits it took following the implementation of several International Trade agreements at the start of the new century and the great financial crisis of 2008.
Our region is experiencing many of the pains that similar U.S. Industrial/Manufacturing cities have gone through in the present generation. “Legacy Cities,” as these communities are defined, relied on industrial production to provide their economic base. Unfortunately, they have seen their manufacturing capacity diminish greatly. As a result of the economic flux, these communities have seen reduced real estate property demand lead to diminished property values and in some cases abandonment. This has presented many challenges to municipal governments (and their resources), constraining their ability to deal with burgeoning economic and social predicaments.

But what should be understood is our region, and its various communities, has many assets that can be catalysts for regeneration; including vital downtown areas, stable and historic neighborhoods, transportation networks, educational assets, medical centers, and rich artistic and cultural resources. In regenerating our area, we must capitalize on these assets and relate their value, while renovating our local economic engine.

What’s First? We have to have a real plan!

In our regional corridor (Megalopolis), a true success story is Greenville-Spartanburg, South Carolina. Upstate South Carolina has seen many successes over the past 25 years related to its recruitment of BMW to build an automotive plant in the area. This has led to the formation of an “Economic Cluster” of automotive related businesses. This did not occur through happenstance. Upstate South Carolina interests began exploring BMW recruitment possibilities years before it happened.

Upstate South Carolina leaders did not bemoan the lack of trained/experienced workforce and by all accounts BMW did not care either. When the plant opened in 1994, 60,000 people had applied for 1,000 jobs. Since then, BMW has invested about $10 billion and created 9,000 direct jobs — not counting the indirect jobs related to automotive manufacturing. BMW has also invested in the local technical college system to enhance the concept of pre-employment training of potential workforce. The “halo effect” and positive publicity related to the BMW experience is something money could not buy.

In Hickory, $40 million in Bond Referendums were approved in 2014. The City Officials’ plan was pitched to businesses well before it was proposed to citizens. This plan had basically no input from Hickory’s citizenry. The subsequent years have lacked the energy displayed in the referendum election process and lacked the accomplishment of any meaningful transformative objectives.
We need input from the community’s people to develop a forward “Vision” and a strategy to implement it. The Vision’s goals need to be purposeful; not a rearranging of the status quo. An audit, assessing market realities, should be performed to develop a foundation for a rooted economic/financial plan that helps implement the Vision. The plan should take into account the area’s present residents and potential attracted newcomers. The plan should be creative, fundamentally sound, and have specific details about the elements that will lead to the expected outcome.

Plan objectives should be deliberated openly and honestly from all perspectives. Setting up transparency processes, accountability measures, and defined benchmarks ensure the plan is followed and builds trust. This leads to community buy-in and the support necessary to face difficult tasks head on.

Like Greenville, plans and targeted investment are important; but much of what we need, money cannot buy. Our most important asset is our people.

James Thomas Shell
The Hickory Hound

Cliff Moone:

When you attend as many civic events as I do, you frequently hear presentations on economic development in the Hickory Metro Area. Eventually, youget the impression that the operating premise for economic development is “throw as many ideas as you can up against the wall and see what sticks.” I intentionally overstate, admitting I write not as an economist or economic development expert, but as an attentive citizen and dedicated promoter of the region for which Hickory is the hub. Still, from my perspective, the “throw it all against the wall and see what sticks or works” approach may be better than it sounds.

Clearly, any notion economic development in all its facets is an exact science seems obviously flawed. Otherwise, most businesses wouldn’t fail within their first ten years; otherwise, we could predict precisely under what exact conditionsrecessions and expansions will occur; otherwise, successful economic development could be accomplished by formula. This is not to say that economic planners, economists, or even political leaders don’t have any knowledge or experience that applied appropriately won’t help spur successful economic growth.

Today, there’s an abundance of data regarding the conditions under which economic growth is most likely to occur. For example, we know tax policy can have a definite impact, so too, the regulations government places on businesses, whether to limit fraud or for consumer protection, so too, whether appropriate infrastructure is put in place.Additionally, incentives offered by state or local governments can influence economic development. But you don’t have to be an expert to know that no one of these or other “condition setters” is automatically determinative as an input to get the desired output of economic growth. Even something as nebulous as a positive, hopeful outlook versus a negative, “it can’t be done” outlook can make a difference.

Which brings me to the main point this non-expert, sixty-eight year old observer would like to suggest to the critics of the bond projects, the efforts of the area EDC, the Chamber of Commerce’s work in economic development, or the Hickory City Manager’s recently proposed vision to move our city and metro area forward from “recovery” to “prosperity”: When nobody has a “magic bullet,” a shotgun is a really good weapon of choice. When you need a multi-faceted, non-singular solution, no one aspect of any “plan” will bring you to the promised land. It takes a lot of ideas and a lot of folks trying many things to achieve success.

In the midst of the Great Depression, after over three years of waiting for recovery to just happen, a new President, FDR,initiated what he termed the “New Deal.” The operating principle of that New Deal was every idea is welcome and we’lltry anything and almost everything. We’ll keep what works and we’ll discard what doesn’t. It mostly worked, not everything, but despite what revisionist historians will assert, the New Deal approach lifted a country frozen in fear, defeat and despondency back on its feet and on a path to economic recovery.

Most critics of the recent economic development proposals for the Hickory Metro Area I’ve encountered have argued something like “a City Walk or a River Walk won’t bring permanent, sustainable jobs.” Others have critiqued the 1764 Project as being too removed from Hickory or have critiqued some other specific piece of the plans being proposed. Others have suggested that the planning process itself has been out of order, diminishing the potential effectiveness for attracting new businesses.

These critiques have some merit. I suggest none I’ve heard are so crucially serious as to derail the potential success of what development professionals, business leaders, our political leaders, and the voters have envisioned and initiated. Admittedly, I’m an optimist, but notwithstanding that every plan, every vision has flaws, I remain excited and on board with our multi-faceted, “build it and they will come,” now is the time, better try something, and let’s see what sticks adventure toward a better economic future.

Thom’s Questions to Cliff:

Cliff, I agree that Economics is an inexact science. Your proposal, the shot gun approach, is valid if the ideas process comes through a group of diverse individuals from different social and cultural backgrounds, but coming from an individual (or small, closed circuit group), it reminds me of what we call in the restaurant business, “Winging It,” which is what we do when we aren’t prepared and we improvise to get through a moment.

I would like to ask: 1) Even if we do follow the shotgun approach, shouldn’t we set benchmarks and metrics to define a program’s success or failure?

2) Given that the people of the community are putting their full faith and trust in Community Leadership in this endeavor, isn’t part of the leadership role to define the “Vision” and its objectives? As a member of Hickory’s Bond Commission, here is your opportunity to tell us specifically what we are doing in all of this to bring about more jobs and increased prosperity in our area?

Cliff’s Answers:

1. I think that the “benchmarks” are fairly obvious. No matter what ideas for economic development are tried, as City Manager Warren Wood has indicated, results will be measured by “Job Growth, Population Growth, and Tax base Growth.” I think these are reasonable metrics to look at when assessing economic development success.

2. In answering this question, let me comment on a couple of things Thom says in his statement above. First, I am not “proposing” a “shotgun” approach. I am commenting on the reality that when planners and citizens and government leaders do not have a “magic bullet” to ensure economic growth, they will inevitably and rightly suggest a multi-faceted, multi-level approach to what is a complex and multi-layered problem. If one is simply going to be a “critic,” by zeroing in on one or two specific aspects of an approach as if those were the only actions being taken, then of course, it is easy to say it won’t work. For example, I agree that the amenities infrastructure of the Bond Projects, whether we are talking Gateways, River Walk or even the City Walk will not, in and of themselves “create” sustainable job growth. What they will do is project a new and more vibrant image for the city and establish new conditions making Hickory more attractive as a place people want to live and work. Indeed, as just one aspect of an economic development plan, “place making,” as Mr. Wood describes the Bond Projects, is very important, but clearly not all encompassing in bringing a new era of prosperity to our area.

As to Thom’s implication that the economic development process is being carried out through a small “closed circuit” circuit group is not completely accurate. I find that the Bond Commission, for example, is made up of individuals of many varied professional backgrounds, is diverse in the ages of the people involved, and is inclusive as to race and gender participation. Also, it should be noted that members of the Commission participate on staggered terms, so every year, new members are brought on board expanding citizen participation. Personally, I would advocate for more minority community inputfrom the African American, Asian, and Latino communities. I strongly believe that if more persons from these communities will apply to serve, the City Council would gladly appoint them.

I would mention as well that all of the meetings of the Bond Commission and its subcommittees are publicly noticed and open for anyone to attend. I attended almost every meeting of the Commission for a year before my appointment, and except for not being able to “vote” on specific proposals during that time, I was allowed and encouraged to join in on all the discussions as much as any appointed member. Finally, it should be noted that beyond the Bond Commission, the local Chamber of Commerce has also been very active in pursuing a vision for the future economic growth and development in our region. Various committees and working groups, most recently including the K-64 Education Project, are actively engaged in the process of envisioning and planning to address the challenges our area faces. To my mind at least this is not “winging it.” It is instead a rational, multi-faceted approach to the multi-dimensional problems involved with economic development and bettering our community, which I expect to see yield positive, long term results.

Cliff’s Questions to Thom:

Thom, I generally agree with your description of what happened here since 2000. That’s pretty well established history. I also concur with you about our assets and much of what you have to say about a “vision” and “plan.”

Where we diverge in our views is when you start asserting that we have had “no input from citizens” on the Bond projects. First we had and continue to have some public hearings and discussions at City Council before putting the Bond Referendum to a vote. Then the citizens voted. Since then, the Bond Implementation Commission has met at least quarterly (and subcommittees even more often) all of which were open to the public. The Commission itself (and its individual members) is a conduit of and for citizen input on an ongoing basis. Members of the Commission also serve limited terms so new members are often being added.

So, my question is what is your evidence that citizen input has been or is lacking in this aspect of our economic development plan?

Second, your comment about the projects now in process “have lacked the energy displayed in the referendum…” reflects a concern I, as a Commission member have voiced on several occasions. Despite some small efforts to keep the public informed about the progress of the projects, not enough has been or is being done in this area in my view. However, those who are well acquainted with where things are in the implementation process are aware that we are right where we are supposed to be as we move toward our first “groundbreaking” in 2018.

What would you propose as ways to better keep the public attuned to the progress being made and to keep people “energized”?

I also agree that our “most important asset is our people.” One aspect of economic development neither of us really addressed in our articles is the education of our citizenry for 21st century jobs. According to the data from the Chamber of Commerce here, there are more than 3000 unfilled positions in our MSA, due primarily to the lack of appropriately trained workers.

What specifically do you suggest ought to be done educationally to enhance the preparation of our citizens for the present and future?​

Thom’s Answers for Cliff:

With respect to citizen input, my evidence comes from Hickory City Leadership three years ago, when they said, “they only wanted ‘positive people’ serving on the ‘Bond Commission’.” To me, the subsequent lack of energy after the voting process is because the vast majority of the people in the community don’t feel like they are a part of these projects. The evidence speaks for itself.

The critical thinking process nets the best results. We put the cart before the horse. It seems, city officials decided what they were going to do and created a process to implement it, instead of creating a process to decide what we needed to do to move our economy into modern realities.

Unfortunately, trust is not the default setting in our community, because of how we have been governed in the past. Where is the transparency website that we were promised (and the public paid for) right after this referendum was passed. Mayor Wright championed this and it should be done to honor him. Transparency processes, accountability measures, and defined benchmarks ensure plans are followed and builds trust.

With respect to the Chamber’s hypothetical jobs, that’s just the Chamber being the Chamber. Their job is to represent their shareholders, and that’s really local big businesses. Established big businesses want to say they aren’t hiring ‘because people aren’t qualified.’ If the demand were there, they would find a way to fill the positions. When BMW chose Greenville, neither they nor South Carolina officials said anything about workforce quality. They had 1,000 jobs, 60,000 people applied, and they filled ‘em.

How does it behoove us to constantly denigrate our workforce? Our history has shown the ability to train a workforce and have them be very productive.Over time, BMW has invested multi-millions of dollars in pre-employment training at Upstate South Carolina’s technical colleges. I know some local businesses are dabbling in that today, but if big business wants the rewards, then it is the responsibility of big business to make that investment. It is a company’s responsibility to train its workforce.

With regards to education, the responsibility of the public is to make sure that children have a solid foundation of fundamentals and to make sure adults can enhance themselves through libraries and public education and arts infrastructure. That’s one thing we’ve gotten right around here. Will we continue to make those investments? I certainly hope so.